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Financial Literacy CFA Flashcards | StudBud
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Financial Literacy CFA
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What concept is best explained by the statement, "Money spent here can't be spent there."
Financial Literacy CFA
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1
What concept is best explained by the statement, "Money spent here can't be spent there."
delayed gratification
law of diminishing marginal return
opportunity cost
significant purchases
2
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opportunity cost
interest rate
inflation
time value of money
3
Explain the risk/reward dichotomy of investing.
more risk/more reward
no relationship
less risk/more reward
more risk/less reward
4
Which could be a negative consequence of taking out student loans &/or credit card debt?
Having to delay investing/saving for future b/c of loan pmts
Not having flexibility in career options b/c of loan pmts
all of the above
Not having freedom to be stay-home parent b/c of loan pmts
5
Why is insurance something that protects, not fleeces, the customer?
Keeps you from spending discretionary money
No benefit to customer
Protection in the event of unforeseen events
Low premiums make it easy to purchase
6
Why is using credit beneficial to the bank and NOT the customer?
Consumers routinely beat banks
Banks make money on compound interest
Customers make money in payments
Banks get paid back over time
